what do you think? car question before filing�

[niconico]

i needed a car bad and i just started paying my lawyer so I can file chap 7 soon....

my car was very old and basically just died... its was valued at$800 from carmax. to make a long story short

went to buy a new car but couldnt get financed, so my stepmom (with an 850 credit score) purchased it under her name but I will be paying for it. To get the deal that we got the dealer fudged the numbers by pricing my car at 3700 dollars and combined that with a 3500 cash that i put down to give me the deal....

does this suck for my chap 7? nothing is in my name and it looks like there was a 7000 down payment on my 18000 car?

orginally my lawyer said not to put more than 4000 down on a new car but it was ok to get one.....should i worry..?

I will ask my lawyer next week when i see him again i just wanted something to ease my mind or freak me out...

[SinkingFast]

The new car isn't in your name.

Your old car died.

You can tell the Court you sold it and used the money to pay "Living Expenses".

Is your Vehicle Exemption more than the $800 valuation you got from CarMax?? If so, sounds like you should be alright there. If the old car was worth less than you could cover with your Exemption, the Trustee couldn't take it anyway.

The bigger problem I see is how do you explain to the Court where such a large amount of cash went?? The $3500 down payment money, that is. If that debit shows up in your Bank Statements that get copied to the Court, you might have some serious explaining to do.

If you say you bought a car that's in Mom's name, it sounds like a Preferential Transfer to an Insider. The Trustee could go back to Mom and ask for $3500.

[ameliabedilia]

I am not an expert, but the biggest issue is your actual monthly payment, not necessarily how much you put down. How did you take the money out of your account? If you took it out and gave it to your stepmom, I think that could cause a problem. BUT, I am not sure about the $3500 down payment, so please do not take my word as fact. Someone else will have to chime in on that.

[CindyLou]

I agree. There is not problem with the car trade no matter what he put. The value is the value. It was 800.00 and that is all that will count.

If you state exemption is 4000 (which I am assuming because of what your attorney said) then if you explain the situation to our attorney regarding needing a car he might be able to convey that info in the your BK situation regarding where the cash went, if it in fact came from you bank account. It's not like you put money down on a car that someone else is driving. Ask your attorney. There may be some type of lease agreement that can be drawn up between yourself and your step mom so that you will be able to show that you are driving the car.

Come to think of it, how are you insuring the car in your name? That may be another way to show that it is fact a car that you are driving by the fact that you are listed as a driver on the insurance.

I don't think what you did was the best decision just prior to a BK, but the best thing you can do is let your attorney know the details and make sure its all out in the open in your BK, that way there is no question for the trustee.

[niconico]

right....but

the money that was put down on the car was in the form of a check from my stepmother, not my account at all....

I had been saving cash under my mattress and not in my bank account...

i think my state exemption is 6000 for a car...i live in florida...

no i can not get insurance on the car myself since its in my stepmothers name, but she can put me on her insurance since I will be driving it...

I know it was not the wisest decision a couple months before I claim chap 7 but my job requires me to have reliable transportation. And the car that i was driving was very unsafe and required about 3000 in repairs. And even if I paid for those repairs the car would only still be valued at 1000 according to edmunds.....

so basically it came down to
car = keep job
no car = no job
no job = no income...

[helpless]

How are you going to claim the car payment if it is in your stepmom's name?

[keepmine]

Since the car is in the name of another party, the trustee may not allow the payment as an expense.